For an industry that is seeking innovations to protect it from the recession in Europe, Orange France has demonstrated a genuine "˜thinking outside the box' strategy. With one strike, it has raised its green credentials, raised funds for an environmental charity, saved money for some of its customers and made money for itself.
Orange's offer is effectively a SIM-only package, as it asks existing customers to sign up for a 12 month contract without offering them a new handset.
France-only offer, so far
Under the terms of the offer, which is available to its customers in mainland France only, Orange will give a customer a €40 cheque if they renew their subscription for a further 12 months, but continue using their mobile handset. A further €5 is donated to the World Wildlife Fund (WWF). The offer has been in place since early March, but is only available to customers who have accumulated at least 1,500 points under the Orange loyalty programme.
Orange is positioning the offer as part of its ecological approach to commercial policy and its relationship with customers. It has developed ecological product labelling, which helps customers to choose handsets according to their environmental rating. With its latest SIM-only offer, Orange said it is encouraging customers to extend their mobile phone's lifecycle, reduce raw material usage, limit energy consumption and cut waste.
Part of a growing trend
Generally, operators see SIM-only deals as a no-frills mobile contract package and are using them to push up their postpaid customer base. Mostly, operators are keen to promote SIM-only as it helps them to cut down on handset costs (subsidies where applicable) and makes for an effective customer retention tool.
Orange and SFR already offer SIM-only packages in France and this latest offer is part of a service/marketing evolution in SIM-only offers around the world.
Another blow for handset makers
The growing trend towards SIM-only deals is a threat to handset makers, especially the linkage in consumers' minds between doing their bit for the environment by hanging onto their phones longer. Many will need little encouragement in these tough times.
Handset makers have long anticipated the move and are trying to diversify, offering content services and setting up application stores, which in turn disrupt the business models' of operators.
Will the handset makers succeed in their fight back? Ultimately, promoting technologies such as Y-Comm and device/service bundles such as Amazon's Kindle could tilt the balance of power in favour of the handset makers.
Emeka Obiodu, senior analyst, Ovum